Tag Archives: Business

The tax reform bills proposed by the House and Senate contain some similar proposals, but the many differences warrant separate examination. While unknown compromises can be expected before any legislation hits the president’s desk for consideration, here are the highlights from both bills:

HIGHLIGHTS FROM BOTH BILLS

House Bill

Senate Bill

Lowers corporate tax rate to 20% from 35% starting in 2018.

Eliminates common personal deductions: state and local taxes, personal property taxes, deduction for medical bills, unreimbursed business expenses.

Gives an income tax deduction for income from some “pass through” businesses. Those are businesses that report income on Schedule C. Deduction is limited. Lawyers, engineers, consultants, and doctors cannot take the deduction.

Changes the capital gains tax structure.

Lowers corporate tax rate to 20% from 35% starting in 2019.

Eliminates common personal deductions: state and local taxes, property taxes, personal property taxes, home equity loan interest, unreimbursed business expenses.

Raises the income levels for personal income tax brackets and lowers tax rate for the highest income tax brackets. People earning $1,000,000.00 or more per year get the biggest break.

Raises standard deduction from $6350 to $12,000 for a single person. Child tax credit is raised to $1650 from $1000, but the dependent exemptions are eliminated completely.

Gives an income tax deduction for income from some “pass through” businesses. Those are businesses that report income on Schedule C. Deduction is limited to a % of the owner’s W-2 income. Lawyers, engineers, consultants, and doctors cannot take the deduction.

Excludes business income earned overseas. In other words, companies won’t have to pay US taxes on overseas earnings.

Imposes limited tax withholding on independent contractors.

Eliminates the 50% business entertainment deduction but keeps the 50% meals deduction.

Expands businesses that can use cash method accounting.

If you have concerns with how tax reform will affect your bottom line, talk to your accountant. The House is scheduled to vote on Thursday, November 16th, and the Senate plans to vote the week after Thanksgiving. Elected officials want to know whether constituents favor or oppose these bills. Here’s a website that will give you the contact information for your elected representatives: https://whoismyrepresentative.com/.

Employers are required to keep an employment eligibility verification form (I-9) on each employee. The form documents the employee’s citizenship status and eligibility to work in the United States. In July, U.S. Citizenship and Immigration Services revised the form for use beginning September 18, 2017. The new form only applies to new hires; employers don’t have to fill out the new form for current employees.

Where is the new form? You can find the new form I-9 in English and Spanish as well as instructions here: https://www.uscis.gov/i-9.

What changed? The changes seem minor. The most significant change is that U.S. citizens born abroad can now use a Consular Report of Birth Abroad (Form FS-240) as proof of status. Minor edits were made to the form instructions.

Keep a copy of the completed I-9 in the employee’s personnel file. I-9 forms do not get filed with any state or federal agency.

It seems a lifetime ago that the Department of Labor (DOL) announced changes to employee overtime rules that would raise the salary threshold for exempt employees.* The rule was to take effect on December 1, 2016. Many employees who had been exempt from overtime would be eligible for overtime pay under the new rule which raised the exemption threshold to $913 a week: $47,476 per year rather than the current $23,660. Employers scrambled to revise job descriptions and policies regarding overtime work to comply with the rule.

Twenty-one states file suit to challenge the new rule. On November 22, 2016, the U.S. District Court in Sherman, Texas granted the states’ motion to prevent the rule from taking effect. The DOL appealed the decision to the Fifth Circuit. Briefing was completed last month, and it appears that the DOL has abandoned the new salary level. Instead, the DOL is seeking information. On July 26, the Federal Register published a request for information posing 11 sets of specific questions for public comment. Questions include whether there should be multiple salary levels for exempt employees based on factors such as inflation, employer size, and census region; how setting different exemption levels for executive vs. administrative employees would affect businesses; and whether the exemption test ought to be based solely on the employee’s duties rather than salary. Comments are due by September 25, 2017. The questions and instructions for submitting comments are here. Anyone can submit a comment, and so far over 65,000 comments have been submitted.

What should employers do? Nothing for now. Now, we wait for the Fifth Circuit to issue an opinion.

Finally, have a successful new year!

In the wake of U.S. Supreme Court Justice Scalia’s death, there has been a lot of political hullabaloo about the confirmation process for Chief Justice Merrick Garland of the D.C. Circuit, President Obama’s nominee, to fill the position. However, little of the political maneuverings has anything to do with what is most important to small business owners: whether his judicial opinions have helped or harmed businesses.

Let’s take a look at a few opinions authored by Justice Merrick to see what we can glean.

First, there are several federal agencies that have regulatory power over American businesses including: the Department of Labor, the National Labor Relations Board, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Internal Revenue Service, and the Federal Trade Commission. Justice Garland has a reputation for giving deference to agency determinations. Most of the time, agency contact with a business happens because the business has been accused of violating a rule, regulation, or statute.

When a business is appealing an adverse agency decision, Justice Garland appears to rule in favor of the agency more often than not.

Here is an example that explains why:

In a case involving the escape of a large amount of a corrosive and deadly chemical that sent 150 people to the hospital, the OSHA cited the business for multiple safety violations. The case went to a hearing in front of an administrative law judge who affirmed most of the violations. The company appealed to the D.C. Circuit, and in upholding the violations, Justice Garland wrote that the Court must uphold OSHA’s fact findings and conclusions so long as they are supported by substantial evidence and not arbitrary, capricious, abuse of discretion, or otherwise contrary to law.

This is simply a restatement of what the standard of review already is.

However, Justice Garland went on to quote a prior D.C. Circuit opinion stating, “We defer to [an agency’s] interpretation of the Act and regulations, upholding such interpretations so long as they are consistent with the statutory language and otherwise reasonable.”

The opinion goes on to painstakingly review OSHA’s fact findings. What this opinion tells me is that Justice Garland is not an activist judge. He follows historical precedents. Unfortunately, we are in an era when those precedents frequently favor employees over their employers.

This is not to say that Justice Garland hasn’t authored decisions favorable to businesses. He has.

When an employee wrongly tried to invoke protection of the Americans with Disabilities Act, Justice Garland sided with the employer. The employee asked for reduced work hours as a reasonable accommodation for arthritis. Days later, she fell and stopped working. For four months the employer asked for information about her health condition. She gave none, so the employer asked her to return to work. She didn’t. The employer terminated her. After that, she sent a doctor’s note saying she was totally disabled and could not work. She claimed the employer failed to give reasonable accommodation and retaliated against her. The trial court sided with the employer, and the employee appealed. Justice Garland wrote, “there can be no genuine dispute that [the employee] was not a qualified individual . . .one who can, with or without reasonable accommodation, ‘eperform the essential functions’ of her position.” Noting that an essential job function is the ability to appear for work, the Court found that the employee’s termination was legitimate, so there was no retaliation.

These are only two of the many legal opinions authored by Justice Garland.

However, they illustrate that he is a jurist that painstakingly reviews the facts of each case and who analyzes and complies with legal precedent. This is consistent with the observations of most commentators who have described Justice Garland as a moderate and as more conservative than President Obama’s previous nominees. What is apparent from the two cases described here is that Justice Garland appears to be neutral – neither pro-business nor anti-business.

Interestingly, Justice Garland’s father ran an advertising business out of the family home. Justice Garland describes it as the smallest of small businesses. He is known for being tough on crime and for having served as lead investigator and prosecutor of the Oklahoma City bombing case. Perhaps most importantly, Justice Garland has garnered praise from both sides of the aisle – Republicans and Democrats.

Regardless of the outcome, the path this nominee takes through the confirmation process will be interesting to watch.

This is a sample policy intended as a general example. This policy is provided as a free service and is intended for informational purposes only. It is not legal advice. Before enacting a weapons free policy, it is a good idea to consult an attorney.

No weapons of any kind are allowed on the premises. This policy applies to all persons entering the premises except authorized security personnel and law enforcement. To be clear, this policy applies to customers and employees, and the policy prohibits all weapons whether concealed or carried openly. Further, all employees including full-time employees, part-time employees, temporary workers, and independent contractors are prohibited from carrying weapons outside the premises when acting in the course and scope of employment. Texas law allows private businesses to ban guns from the business premises even if the gun owner has a concealed carry permit. We have posted the required notices prohibiting handguns at all public entrances. It is a misdemeanor crime of criminal trespass to carry a handgun into a business that has posted the required notice or to refuse to remove a handgun from the business when asked. It is also a crime to intentionally or knowingly display any type of firearm in a public place in a way that is calculated to cause alarm. The law allows handguns to be carried in a parking lot or parking garage only if they are concealed and secured. In other words, the handgun should be hidden from sight, and the vehicle should be locked.

Any employee that carries a weapon into the building will be subject to discipline including immediate termination.

Do not confront someone openly carrying a weapon. If an employee sees a person carrying a weapon on the premises (the violator), the employee should notify security and a supervisor immediately. If the violator is carrying a weapon in a manner that causes concern for safety, call 9-1-1 and request police assistance. Follow the instructions provided by the 9-1-1 operator.